Defence budget goes up by just 5.6 per cent

The amount allocated for defence at the budgetary stage in FY 16-17 was Rs 2,58,589.32 crore, which increased to Rs 2,59,480.13 crore at the Revised Estimates (RE) stage. With a 5.6 per cent increase over RE figures for FY 16-17, the increased defence allocation for FY 17-18 will only cover the inflation costs.

For the coming year, Rs 1,82,534.42 crore has been allocated for revenue expenditure while Rs 86,488.01 crore has been earmarked for capital expenditure of the defence services. Revenue expenditure is for operating expenses of the defence ministry while the bulk of capital expenditure is for procurement of military equipment to modernise the armed forces.

In the current financial year, Rs 78,586.68 crore was allocated for capital expenditure at the budgetary stage, which came down to Rs 71,700 crore at the RE stage. This means that the ministry did not use Rs 6,886 crore for defence modernisation, and the amount was transferred to revenue expenditure to meet the increased salaries bill after implementation of the Seventh Pay Commission.

The marginal increase in capital expenditure will have an effect on the defence ministry’s plans to sign new contracts for defence equipment in the coming year. Last November, the defence minister had announced that 85 deals worth approximately Rs 1,50,000 crore were in various stages of finalisation and approval. With committed liabilities in capital expenditure already made towards Rafale fighter aircraft, M-777 artillery guns and Apache and Chinook helicopters, the ministry will be constrained in signing new deals in FY 17-18.

Moreover, at Rs 1,06,922.79 crore, pay and allowances of the defence services for FY 17-18 will now take away 39 per cent of the defence budget. With the implementation of One Rank One Pension and the Seventh Pay Commission, the salaries and pensions of defence personnel are together estimated to be Rs 1,92,662.79 crore in the coming year.

e-ticket system for soldiers, metro rail policy announced

Finance Minister Arun Jaitley announced development of the Centralised Defence Travel System, which will allow defence personnel to book e-tickets. “They do not have to face the hassle of standing in queues with railway warrants,” Jaitley said in his Budget speech.

The government will also announce a Metro rail policy with focus on innovative models of implementation and financing.

“Metro rail is emerging as an important mode of urban transportation. A new Metro Rail Policy will be announced with focus on innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software. This will open up new job opportunities for our youth,” Jaitley said.